It’s that time of the quarter when the euro zone, and many of its individual members, release their gross domestic product numbers for the three months to Dec. 31.

Nobody expected the euro zone to show anything more encouraging than a continuation of very weak growth, but now we know that it has in fact beaten expectations.

France came in with growth of 0.3%, Germany beat expectations with 0.4%, the Netherlands showed a real spurt with 0.7% and Austria came in with growth at 0.3%. Even Italy, whose economy has not expanded since the spring of 2011, grew 0.1%. Portugal grew by 0.5%. Greece was the only member of the euro-zone today to report contraction, but even there, the economy is improving.

The big number, the euro-zone’s growth as a whole, came in ahead of forecasts, growing 0.3%, ahead of expectations of 0.2%.

Rather dull start to GDP day – France comes in bang on consensus forecast. The euro zone’s second largest economy grew by 0.3% in the final three months of last year, a rebound from the contraction it endured in the three months to September, but not exactly a strong expansion.

Economists estimate that the combined gross domestic product of the euro zone’s 17 members during the three months through December was 0.2% up on the third quarter, a very modest pickup from the 0.1% expansion recorded in the three months to September.

But at those levels, the gap between relief and despair is narrow, and an unlikely return to contraction would put immense pressure on the European Central Bank to urgently provide more stimulus in order to counter the threat of deflation. The best that can be expected is that policy makers, and long-suffering households and businesses, will be reminded that the return to acceptable rates of growth is still some way off.

Michael Hewson, an anlayst at CMC Markets in London reckons today’s numbers are likely to reinforce the image of a two- or even three-speed Europe, “with Germany still leading the way, with some signs of a slowdown, with Spain and Italy still lagging behind while France tries to keep up puffing away at the back like a smoker trying to run a marathon.”

A positive surprise from Germany, which recorded a 0.4% expansion in the final three months of last year. Economists had expected the figure to be 0.3%, based largely on an earlier released estimate for growth in 2013 as a whole.

Since Germany accounts for 28% of the euro-zone total, this makes it possible that the figure for the currency area as a whole will come in a little stronger than the 0.2% expansion expected by economists. It also means that Germany’s economy accelerated from 0.3% in the previous quarter.

It says a lot about how low expectations for the euro zone have sunk that a 0.4% expansion in one of the world’s largest economies can be celebrated, but that’s the way it is. As Carsten Brzeski, an economist at ING Bank puts it:

“Germany remains the economic stronghold of the Eurozone. In fact, this morning’s data was one of those positive surprises the Eurozone has seen too seldom over the last few quarters. Let’s hope it won’t be the last one.”

At last, a proper growth spurt from the euro zone. The Dutch economy expanded by 0.7% in the final three months of last year, having grown by just 0.3% in the third quarter. It’s the euro zone’s fifth largest economy, and accounts for 6.3% of the total, so combined with Germany’s faster-than-expected expansion, that may contribute to a slightly better outcome for the euro zone as a whole than the 0.2% growth expected by economists.

There’s something of a pattern emerging – business investment and exports appear to be the driving forces behind pickups in the euro zone countries that have reported so far this morning, which is moderately good news, although weak consumer spending may add to concerns about the inflation outlook.

Dutch statistics agency CBS said growing exports and higher investments were partly offset by lower household consumption and government spending compared to the fourth quarter of 2012.

Investments in fixed assets grew 5.3% compared to a year earlier, while exports were up 0.4% and imports fell 0.9%. Dutch household consumption was 0.8% lower in the fourth quarter compared to the same quarter of 2012, and has been falling for almost three years now. Government spending was down 0.6%.

The Dutch economy, the euro-zone’s fifth-largest, emerged from a year-long recession in the third quarter.

Evelyn Herrmann of BNP Paribas wrote that she expects German growth to continue to accelerate in the first quarter of 2014. “Sentiment is very positive, factory orders have accumulated and should translate into higher industrial production,” she wrote, adding that exports should benefit from developments in the U.S., U.K. and the euro zone.

Markets in Europe are now open. France’s CAC 40 is up 0.17% at 4320, Germany’s DAX is up 0.16% at 9611.8 and The Nethelands AEX is up 0.26% at 397.97. The FTSE is the only faller so far, down 0.05% at 6655.6.

There was a burst of unexpected vigor in central and eastern Europe during the final months of last year. The euro zone’s weak growth performance over recent years has been a big drag on the economies to its east with which it has close trade and financial links. But with its return to modest growth, the economic outlook for its neighbors has brightened.

Hungary’s statistics office reports that the economy grew by 0.6% in the fourth quarter, a much stronger expansion than the 0.2% forecast by economists. Romania’s economy grew by what for Europe is an astonishing 1.7%, while the Czech Republic almost matched that with a 1.6% expansion.

As the morning advances, things are looking more and more positive for Europe’s economic recovery.

Based on the numbers in so far, economists at Daiwa Europe are pretty confident that the euro-zone economy grew by 0.3% in the fourth quarter, in line with its forecast, but slightly above the 0.2% consensus. But they stress that doesn’t mean further ECB action can be ruled out:

“While such an upbeat growth performance might strengthen the hand of those members of the ECB’s Governing Council who are reluctant to ease monetary policy further, the recent striking divergence in the behavior of activity and inflation, and the likelihood of a further decline in CPI before the present quarter is out, means that deflationary risks cannot be entirely ignored. And so a possible rate cut should remain on the table for discussion at March’s ECB policy meeting.”

Joerg Kraemer of Commerzbank said the GDP reports from France and Germany make it “somewhat less likely” that the ECB will cut interest rates at its March meeting. He says that Germany should continue to outperform the euro zone for a few years still, as the ECB’s low interest rates kindle investments that are sensitive to interest rates, such as business investment.

Another baby step towards a stronger recovery for the euro zone: Austria’s GDP grew by 0.3% in the final three months of 2013, up from 0.2% in the third quarter. Austria accounts for just 3.2% of total euro-zone GDP, but every little helps. (Photo: Getty Images)

Barclays Thomas Harjes says: “We remain confident that Germany’s economy may grow by 2% in calendar year 2014, above its long-term growth potential (1.5%), which should alleviate fears that low inflation could become ingrained in Germany.”

Our markets reporter Tommy Stubbington says so far the markets appear to be taking all this in their stride: Milan’s stock market is Europe’s strongest performer, as Italian assets continue to shrug off political instability. The FTSE MIB is 0.4% higher, while Italian 10-year bond yields are little-changed at 3.72%.

But Italy also faces a fresh ratings call from Moody’s today, which won’t happen until after the markets close.

It’s now almost certain that the euro zone economy expanded for the third straight quarter at the end of 2013, and most probably at a faster pace than the 0.2% expected by economists.

But there is one big, unanswered question: did Italy make a contribution? Italy’s economy last expanded in the second quarter of 2011, but many economists believe the final three months of last year likely saw a return to growth.

With Spain and Portugal already having crossed that threshold, that would provide some hope that the currency area’s troubled southern belt is finally on the mend. Once again in the throes of political turmoil, Italy could do with some good news on the economy.

The Dutch minister of economic affairs, Henk Kamp, said the Dutch economy is finally picking up steam but warned that the recovery will take more time. “We’re not there yet,” he said at a press conference in The Hague. “2014 won’t be a year of robust growth.”

Italy’s economy expanded by 0.1% in the fourth quarter, its first positive number since the ill-fated spring of 2011, national statistics institute Istat said Friday.

The data was in line with expectations and Istat provided few details, saying only the industrial and agricultural sectors expanded and the service sector flatlined during the final three months of the year.

Still, the long-awaited positive figure is welcome for Italians. Indeed, it comes on the day that Prime Minister Enrico Letta resigns, having lost a leadership battle with Democratic Party leader Matteo Renzi.

Mr. Renzi, who is expected to become the next prime minister, likely knew the timing of his challenge would coincide with the positive growth news, Deputy Prime Minister Angelino Alfano said late Thursday.

“Whoever is in power will enjoy an economy recovery that will take care a lot of problems,” Gianluca Garbi, chief executive of Banca Sistema, said in an interview.

Not everyone is so confident. In fact, the outgoing government had expected a better figure, with a quarterly expansion of 0.2% to 0.3%.

A surprise December slump in industrial production trimmed that and highlights how 2014 is “fraught with risk” for Italy, said Raj Badiani, an economist with IHS.

Italy made it across the line, although barely. For the first time in 10 quarters, its economy grew, although at that 0.1% it’s pretty meager.

So we now have pickups in all five of the euro zone’s largest economies, and it’s therefore a certainty that growth in the currency area as a whole accelerated from the 0.1% recorded in the third quarter. The only question is by how much. Ahead of today’s releases, 0.2% was the consensus. Since I’m feeling giddy ahead of a holiday in sunny Ireland next week, I’m going for 0.3%. (Photo: Getty Images)

So what does this mean for the plodding global recovery? On the whole, good news from Europe – while the U.K. slowed slightly, it was still strong by post-crisis standards. And with France, Germany, Italy and Spain all accelerating, the continent may finally be on the way to being an aid, rather than a hindrance, to the rest of the world, although it looks like weak consumption means demand for imports has remained muted.

Still, Europe’s grindingly slow recovery isn’t going to compensate for weaker growth in large developing economies, with China having slowed in the final quarter, and the outlook for India and other economies that have seen large outflows of capital in recent months very uncertain.

As seems to have been the case since the crisis began in 2008, progress on one front almost always seems to be offset by setbacks elsewhere. And not for the first time, the U.S. remains the best hope as a motor for world growth.

Portugal is the latest euro-zone member to record a pickup in growth during the fourth quarter, to 0.5% from 0.3%.

That was the third straight quarter of growth, which isn’t a bad performance considering the country is still in the throes of an austerity program, and an encouraging sign as its three-year international bailout draws to a close in May. Still, big challenges remain. The government will continue imposing austerity measures to meet budget deficit targets agreed with lenders in the longer term. It has agreed to a lower deficit to 2.5% of gross domestic product by 2015, from around 5% last year. (Photo: Getty Images)

A little nuance to the eastern Europe recovery story: while the Czech Republic and Romania recorded very strong growth in the fourth quarter, Poland’s economy slowed slightly, recording growth of 0.6% compared to 0.7% in the third quarter. Bulgaria also slowed, to 0.4% from 0.5%. So a more mixed picture than it earlier appeared.

And here is the big one – the euro-zone economy grew by 0.3% in the final three months of last year, a better outcome than the 0.2% expansion forecasts by economists and a pickup from the 0.1% rate of growth recorded in the third quarter. For the first time since the end of 2011, GDP was up from the same quarter a year earlier.

But for 2013 as a whole, GDP was down 0.4%, the second straight year of contraction. Most of the euro zone’s members are now growing again, with Italy finally having expanded after nine quarters of contraction of stagnation.

The bad news was limited – Finland contracted for a second straight quarter, meeting some economists’ definition of recession. Estonia slipped back into contraction, having grown in the third quarter.

But the big five economies all picked up, so all in all, a good day for the euro zone. (Photo: Getty Images)

And here’s a clue as to what has driven the euro zone’s return to growth: its trade surplus surged to €153.8 billion ($209.2 billion) in 2013 from €79.7 billion in 2012 to reach the highest level since records began in 1995.

In December alone, it recorded a surplus of €13.9 billion. But its surpluses are more a reflection of falling imports than rising exports, an indication of how weak domestic demand was last year. Eurostat calculates that exports rose by 1% from 2012, while imports fell by 3%.

Greece’s economic contraction eased in the final quarter. Compared to a year earlier, the economy was 2.6% smaller, having shrunk by 3.0% in the third quarter. Bear in mind these are annual figures, not quarterly.

That’s the smallest year-to-year contraction since the first quarter of 2010.

Thanks for joining us for that walk through the euro-zone’s economy. It looks more positive than we expected.

Christian Schulz of Berenberg says that exports and investment are the key drivers of the euro zone growth, that this is reminiscent of “Germany after its crisis and reforms in 2003-2004, and shows that the Eurozone is well on track towards a much healthier foundation for future growth.”